It is not by accident that Swedish companies Ikea, Ericsson, Electrolux, Volvo and Saab are well known far beyond Sweden's borders. For a country that prides itself on doing things in moderation, Sweden is surprisingly bold when it comes to innovation.
L. M. Ericsson, founder of the Swedish company by the same name, probably smiles in his grave seeing the fast-pace innovation that characterizes telecommunications companies today. Photo: Ericsson and Sony Ericsson
It might all start with a good idea, but it takes a whole lot more to create a profitable business. That is where innovation comes in. In an increasingly competitive economic environment, innovation has become a key factor for success — something which Swedish companies have long recognized.
“We give people a lot of opportunities to be creative. Swedes are curious people and are not afraid to try out new things,” says Fredrik Hillelson, CEO of Novare Human Capital, a human resources and business development company based in Stockholm. “When it comes to innovation and human resources, it’s amazing how many multinational companies Sweden has with its only nine million people.”
Don’t kill your customers
Part of Sweden’s success lies in its inclusive and decentralized approach to management. Claes Andréasson, co-author of The Viking Manifesto: The Scandinavian Approach to Business and Blasphemy, says modern leaders have learned a few things from their marauding ancestors. “The Vikings were the first tradesmen in the world. After a few centuries, they decided it was bad business to kill your customers,” he says.
According to Andréasson, other than keeping your source of revenue alive, the recipe for success is simple: make everyone — from employees to suppliers to customers — feel included. “Our ability to work together is one of the secrets of Swedish companies,” he says.
Why not share your new idea with your desk neighbor? Photo: Nicho Södling/Johnér
Picking the best ideas
Ericsson is perhaps one of the most visible examples of a Swedish company that has thrived due to its approach to innovation. Jan Färjh, vice president and head of Ericsson Research, says that in addition to benefiting from its global network of research centers, one aspect of its innovation management is maintaining close cooperation with universities and research institutions.
“We try to take ideas from the academic world and shape them up … and finally bring them over to the development units, which can then make profitable products,” he says. “This is a key area where we’ve been very successful. This means that we have a very tight connection between Ericsson Research and the outside world, but we also bring internal competence and expertise into our development projects.”
Vice president and head of Ericsson Research, Jan Färjh. Photo: Ericsson
The telecommunications giant has consequently implemented an internal innovation process to capture ideas within the organization. “If you, as an individual, have an idea, you have managers who will listen to you,” Färjh says. “You can present your idea, then you might have the possibility to further evaluate the idea, and it can lead to a real project with more resources.
“The other success factor is that we choose the right things. There can be a lot of good ideas, but we are good at seeing what’s important for the time being. That’s what management is — you listen to your employees, but then you make the right decisions.”
Ericsson tries to grab hold of and develop useful innovations in the academic world. Photo: Hans Bjurling/Image Bank Sweden
Creating environmental innovation
Innovation can come in many forms. For Green Cargo, a state-owned transport and logistics company, innovation means integrating sustainability measures into every aspect of its operations.
To assist in the process, corporate social responsibility (CSR) manager Erica Kronhöffer says they use a business management tool known as “the scoreboard” that covers six areas: safety, employees, society, environment, customers and finance.
“There are targets and activities within each of these areas, and also at every level of the company — from the CEO to the guy working in the shunting yard,” Kronhöffer says. “They all have the same picture about what is crucial for Green Cargo.”
The goal is to help everyone within the organization feel like they have an important role to play in the company’s success. “They really can see that they as an individual can make a difference,'” Kronhöffer says.
Democracy is the key
As Andréasson and his co-author Steve Strid write in The Viking Manifesto: “The Viking organization is built on the concept that the freer someone is to speak his mind, the more likely he is to use it. Long before management theory, the Vikings knew that democracy means empowerment and empowerment means passion and commitment. Democracy is not just a nice theory, it’s efficient business.”
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Charlotte West is an American writer and editor. A six-year veteran of the Swedish capital, she's still figuring out the quirks of her host country. She's glad, however, that the Vikings eventually decided to choose more peaceful means of killing off the competition.
The author alone is responsible for the opinions expressed in this article.
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